The BSE Healthcare Index of 21 companies jumped by over 250 points to 3415.85 points from its pre-election result close of 3161.14 points with major pharma shares like Sun Pharma, Divi's Lab, Lupin, GlaxoSmithKline, IPCA, etc have gained smartly. Other pharma players like Cipla, Dr Reddy's Lab, Aurobindo and Biocon also moved up. Meanwhile, the BSE authorities have decided to shift Ranbaxy scrip from BSE Sensex and replace it with Hero Honda scrip.
The significant win of 262 seats by United Progressive Alliance (UPA) in the elections has offered strong signals to investors including institutional investors. Analyst pointed out that the clear majority at the Center will push economic reforms in the coming years. The uncertainty regarding the stability is over and the government will be in a position to take decisions. The new government is likely to implement disinvestment plans, insurance and banking reforms and preference to investments in infrastructure. The foreign financial institutions, domestic institutions including mutual funds have shown greater investment interest on account of win of UPA.
Commenting on the rise of share price of pharma scrips, the analyst pointed out that the growth in pharma shares is modest and not like other sectors viz., metal, consumer goods or IT segments. The pharma shares have always shown relatively small positive fluctuations. The stiff competition, uncertainty about the drug Policy, the problem of patent laws and price control policy are hampering the investment interest largely. However, the stable government for next five years without any significant hurdles from other political parties will give better time to pharma shares. The long term outlook and returns for the pharms are promising one.
With overall better investor's sentiment, Sun Pharma scrip went up by Rs 113.85 to close at Rs 1,412 today. Similarly, Divi's scrip jumped by Rs 96.50 to Rs 1020 and Ipca Lab p moved up by Rs 80 to Rs 490. Few MNCs like GlaxoSmithKline and Pfizer scrip touched to Rs 1250 and Rs 740 a growth of Rs 79.40 and Rs 21.95 respectively. However, Matrix Laboratories and Ranbaxy improved only by Rs 10 and Rs 16 to Rs 176.55 and Rs 222 respectively.